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LAX 12809599v1 99-72242
2
RACs USE 2 APPROACHES TO REVIEWING FOR IMPROPER PAYMENTS
I. AUTOMATED REVIEW DATA MINING
CERTAINTY THAT SERVICE IS NOT COVERED
OR IS INCORRECTLY CODED AND
A WRITTEN MEDICARE POLICY, ARTICLE OR
SANCTIONED GUIDELINE EXISTS
LAX 12809599v1 99-72242
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RACs USE 2 APPROACHES TO REVIEWING FOR IMPROPER PAYMENTS (cont’d)
II. COMPLEX REVIEW HUMAN REVIEW OF THE MEDICAL RECORD
THE REQUIREMENTS FOR AUTOMATED REVIEW
ARE NOT MET (E.G., NO MEDICARE POLICY,
ARTICLE OR SANCTIONED CODING GUIDELINES
EXISTS)
THERE IS A HIGH PROBABILITY (BUT NOT
CERTAINTY) THAT A SERVICE IS NOT COVERED
LAX 12809599v1 99-72242
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COMPLEX REVIEW
RACs REQUIRED TO USE MEDICAL LITERATURE AND APPLY APPROPRIATE CLINICAL JUDGMENT
RAC’s MEDICAL DIRECTOR TO BE INVOLVED IN REVIEWING THE CLAIM DETERMINATIONS
RAC’S RNS OR THERAPISTS TO MAKE MEDICAL NECESSITY/COVERAGE DETERMINATIONS
CERTIFIED CODERS TO MAKE CODING DETERMINATIONS
PROVIDER MAY REQUEST CREDENTIALS OF THE REVIEWERS
LAX 12809599v1 99-72242
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DO YOU APPEAL A RAC DENIAL?
ANY CLEAR MEDICARE RULES, GUIDANCE OR CRITERIA REGARDING THE SERVICE
STATUS OF SUPPORTING DOCUMENTATION CLINICAL STAFF AVAILABILITY AND
SUPPORT INVOLVEMENT OF OUTSIDE CONSULTANTS/
ATTORNEYS TO ASSIST IN REVIEW OF DENIAL
LAX 12809599v1 99-72242
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DO YOU APPEAL A RAC DENIAL? (cont’d)
EFFECT OF BINDING AUTHORITY ON DIFFERENT APPEAL LEVELS
ALJS NOT BOUND BY LOCAL COVERAGE DECISIONS, LOCAL MEDICAL REVIEW POLICIES, OR CMS PROGRAM GUIDANCE; E.G., MANUAL PROVISIONS
AVAILABILITY OF OTHER LEGAL DEFENSES COST VS. BENEFIT OF THE APPEAL
LAX 12809599v1 99-72242
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DO YOU APPEAL A RAC DENIAL?
DOES RAC AUDIT COMPLY WITH RAC CONTRACTUAL REQUIREMENTS?
EXAMPLE: NO REVIEW OF CLAIMS REVIEWED BY OTHER MEDICARE AUDITORS OR FEDERAL AGENCIES
EXAMPLE: CANNOT EXCEED CMS ISSUED LIMITS ON NUMBER AND FREQUENCY OF MEDICAL RECORD REQUESTS
EXAMPLE: DID RACs INVOLVE APPROPRIATE CLINICAL STAFF IN REVIEW
EXAMPLE: DID RAC APPLY CMS RULES/POLICIES OR ITS OWN SCREENING CRITERIA AND RULES
LAX 12809599v1 99-72242
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REBUTTAL TO RAC
UPON RAC DENIAL: REBUTTAL AND APPEAL OPTIONS
REBUTTAL TO THE RAC 15 DAYS OF RECEIPT OF RAC DENIAL POSSIBLE USE TO AUGMENT PROVIDER’S
UNDERSTANDING OF THE BASIS FOR THE DENIAL AND IN ASSESSING WHETHER TO APPEAL
LAX 12809599v1 99-72242
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REBUTTAL TO RAC (cont’d)
NEW DOCUMENTATION COMES TO LIGHT TO SUPPORT A CLAIM
REFERENCE ANY MEDICARE AUTHORITY SUPPORTING PROVIDER’S POSITION
PROVIDER STILL ABLE TO APPEAL, BUT USE OF REBUTTAL PROCESS DOES NOT AFFECT RECOUPMENT OR APPEAL TIME FRAMES
LAX 12809599v1 99-72242
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COST VERSUS BENEFITS OF APPEALING
BENEFITS
A. KEEP/RECOUP CLAIM PAYMENT
B. MAY HEAD OFF SIMILAR DENIALS, IF SUCCESSFUL
C. PROACTIVELY APPEALING MAY MAKE THE PROVIDER A LESS DESIRABLE TARGET
D. PROTECT COMMUNITY REPUTATION
E. MINIMIZE COMPLIANCE REPERCUSSIONS FROM NOT CHALLENGING DENIALS
LAX 12809599v1 99-72242
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COSTS COST OF ASSESSING THE DENIAL
INTERNAL EXTERNAL CONSULTANTS OR LEGAL COUNSEL
COST OF PREPARING AND HANDLING THE APPEAL ALJ (THE THIRD LEVEL APPEAL) IS GENERALLY THE
MOST FRIENDLY APPEAL LEVEL, BUT DOCUMENTATION EVIDENCE MUST BE COMPLETE BY THE SECOND LEVEL
LAX 12809599v1 99-72242
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INTEREST COSTS
IF APPEAL BEFORE RECOUPMENT, AVOID IMMEDIATE RECOUPMENT
BUT: PAY THE PIPER INTEREST LATER IF LOSE SECTION 935 OF THE MMA: RECOUPMENT UNLESS
REQUEST REDETERMINATION BY THE 30TH DAY AFTER THE DATE OF THE DEMAND LETTER AND UNLESS REQUEST RECONSIDERATION BY THE 60TH AFTER AN ADVERSE REDETERMINATION DECISION
RECOUPMENT AFTER AN ADVERSE RECONSIDERATION DECISION EVEN IF APPEAL TO THE ALJ
LAX 12809599v1 99-72242
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STILL COULD LOSE LOSE PAYMENT FOR CLAIM
PLUS
LOSE INTERNAL AND EXTERNAL
RESOURCE COSTS
LAX 12809599v1 99-72242
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• CANNOT WAIT UNTIL ALJ LEVEL TO PUT TOGETHER THE APPEAL
• EARLY PRESENTATION OF EVIDENCE IN THE APPEAL PROCESS
CRITICAL NATURE OF RECONSIDERATION LEVEL OF APPEAL
ALL OF THE DOCUMENTATION THAT THE PROVIDER/SUPPLIER EXPECTS TO USE FOR THE REST OF THE APPEAL PROCESS MUST BE PRESENTED BY THE RECONSIDERATION APPEAL LEVEL
PROVISION OF DOCUMENTATION THEREAFTER SUBJECT TO “GOOD CAUSE” CONSIDERATIONS
LAX 12809599v1 99-72242
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GENERAL LEGAL ISSUES RELEVANT TO RAC APPEALS
ARE RACs AUTHORIZED BY CONGRESS TO REVIEW MEDICAL NECESSITY?
LAX 12809599v1 99-72242
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GENERAL LEGAL ISSUES RELEVANT TO RAC APPEALS (cont’d)
ARE RAC REVIEWS
UNCONSTITUTIONAL AS A RESULT OF
THE CONTINGENCY FEE
COMPENSATION PAID TO RACs? VALIDATION AUDITOR DISAGREED WITH
RACS IN 40% OF CASES REVIEWED
LAX 12809599v1 99-72242
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COMPLIANCE REPERCUSSIONS?
RACs ARE TO REPORT SUSPECTED FRAUD AND ABUSE
MMA OF 2003 DID NOT PROHIBIT INVESTIGATIONS BY CMS OF FRAUD AND ABUSE ARISING FROM A RAC OVERPAYMENT DETERMINATION
OTHER MEDICARE ENFORCEMENT AGENCIES WILL SEE THE DENIAL STATISTICS
LAX 12809599v1 99-72242
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ERRONEOUS OR QUESTIONABLE RAC DETERMINATIONS MIGHT BE HARDER TO CHALLENGE AT THE BACK END IF THOSE DETERMINATIONS BECOME THE BASIS OF A COMPLIANCE INVESTIGATION
IF THE RAC FINDS OVERPAYMENTS OF A SYSTEMATIC TYPE, PROVIDER CORRECTIVE ACTIONS MERITED PARTICULARLY IF DO NOT APPEAL
IF DO APPEAL, THERE IS A LEGAL DISPUTE OVER WHETHER ANY KNOWLEDGE OF FALSITY UNDER THE FALSE CLAIMS ACT
LAX 12809599v1 99-72242
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PREEMPTIVE ACTIONS BY THE PROVIDER SELF-DISCLOSURES TO THE OIG, VOLUNTARY
REFUNDS AND CORRECTIVE ACTIONS TO MINIMIZE FUTURE IMPACT
SELF-DISCLOSURE AND REPAYMENT SHOULD A PROVIDER DISCOVER THAT IT MAY HAVE
RECEIVED AN IMPROPER MEDICARE PAYMENT, MAY DECIDE TO MAKE A SELF-DISCLOSURE OR VOLUNTARY REFUND
LAX 12809599v1 99-72242
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IMPACT ON RAC AUDITS: RACs MAY NOT REVIEW CLAIMS THAT
ARE UNDER REVIEW BY ANOTHER
GOVERNMENT ENTITY
RAC COMPENSATION IS IMPACTED BY
SELF-DISCLOSURES AND VOLUNTARY
REFUNDS
LAX 12809599v1 99-72242
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VOLUNTARY REPAYMENTS MADE TO THE MEDICARE
CONTRACTOR
NO RAC FEES IN CERTAIN CASES
MEDICARE PROGRAM INTEGRITY
MANUAL, CHAPTER 4
LAX 12809599v1 99-72242
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OTHER CORRECTIVE ACTIONS
REDESIGNING OR IMPROVING INTERNAL CONTROLS EDUCATING AND TRAINING OF RELEVANT PROVIDER
STAFF ASSURING POLICIES ON DOCUMENTATION CODING
AND BILLING ARE UP TO DATE AND COMPLIANT PERIODICALLY MONITORING CLAIMS VIA AN
INTERNAL AUDIT TO ASSURE THAT DOCUMENTATION, CODING AND BILLING IS BEING DONE APPROPRIATELY
LAX 12809599v1 99-72242
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RACs CAN EXTRAPOLATE RACs MUST FOLLOW SECTION 935(a) OF THE
MEDICARE MODERNIZATION ACT OF 2003 CMS ENVISIONS A RAC USING EXTRAPOLATION IN
CASES WHERE THERE WAS EVIDENCE OF A SUSTAINED OR HIGH LEVEL OF PAYMENT ERROR OR DOCUMENTED EDUCATION INTERVENTION BY THE MEDICARE CONTRACTOR